Oil experts this week seem to be tripping over themselves to offer dire predictions of where the price of a barrel of oil is headed.
Nomura Holdings Inc. analysts said they expect $220 a barrel if production is disrupted further in Libya and Algeria. Someone else burped up $300 to $400 a barrel.
Prediction is a fool’s game for reporters, so don’t look for one here. But recognize that such high estimates represent Armageddon-style planning. (How many Americans still have duct tape and bottled water in their basement?)
In fact, the U.S. economy has been doing “fine” with oil in the $80 to $90 a barrel range, if you consider 9 percent unemployment and a zero-percent interest rate policy fine. So if this is a temporary blip on the Energy Fear-O-Meter, don’t worry and keep planning that RV roadtrip to Yosemite for this summer.
However, if we have begun a sustained march above $100 a barrel for crude oil that lasts for months, the U.S. economy would likely be headed for a slowdown.
Consumers instinctively pull back when gas prices hit $4 a gallon. We saw it during the summer of 2008. Let’s hope we don’t see it in the summer of 2011.